How to Get the Best Financing Deals for Used Cars
How to Get the Best Financing Deals for Used Cars
Posted on January 5, 2024
Few people have enough cash lying around to purchase a vehicle, especially a new one. Acquiring a loan to finance a used car is a common solution. This can be done through a banking institution, car dealership, or online. Keep reading for more car financing clarity.
Types of Car Loans
Whether you wish to obtain financial aid through a bank, credit union, or even privately, seek pre-approval beforehand. Finding the best rate for your particular circumstances will save you time and hassle in the long run.
If you wish to outsource the task of obtaining a personal loan, car dealerships will oversee this process on your behalf. The dealership will try to obtain the best loan for you, saving you time and alleviating unnecessary stress. However, this process is left entirely to the car dealership, leaving you with little control over your financial choices.
Alternatively, submit an application to obtain online financing. This is an enticing option for those who have a low credit score. Once your application is processed, you’ll be connected with various dealerships to find the most suitable choice to meet your needs.
Credit Scores
Credit scores are based on your credit card history and previous loan activity. A high credit score indicates a greater chance an individual will repay their loan timeously. Low credit scores show a poor likelihood of loan repayments. Higher credit scores will help you to obtain a loan at a good rate. You may have difficulty securing a decent loan at a favourable interest rate if you have a low credit score. However, it’s still possible.
Monthly Loan Expenditure
Budgeting is essential when financing a car, and applying the 20/4/10 rule is a good idea. This equates to a minimum of 20% for the loan’s down payment with a four-year finance plan. The monthly payments should total approximately 10% of your gross income per month. The car’s operating costs should also be taken into consideration when choosing a car loan.
Interest Rates
Interest rates include fixed and variable. Fixed interest rates are set and aren’t altered for the duration of the loan. Even if the market rate increases, your loan payments are already set. Variable rates can be more risky. These rates are dependent on market fluctuations and can increase or decrease at any time. Find a certified pre-owned car. These vehicles usually have better interest rates, extended warranties, and also undergo safety testing.
Here at Ontario Auto Outlet, we offer the best financing. Used cars are what we do best! Pay us a visit to find your dream car, and we’ll guide you through all the financial steps!